Finra fines Merrill Lynch $2.5M in sales charge case
The industry-sponsored group that oversees stock brokers fined Merrill Lynch $500,000 Wednesday for failing to provide sales charge discounts to eligible customers on certain investments.
The industry-sponsored group that oversees stock brokers fined Merrill Lynch $500,000 Wednesday for failing to provide sales charge discounts to eligible customers on certain investments.
Merrill Lynch agreed to a settlement without admitting or denying the allegations, but consented to the entry of findings by the Financial Industry Regulatory Authority.
As part of the settlement, Merrill Lynch will pay about $2 million in restitution to customers overcharged since January 2006.
FINRA alleged that Merrill Lynch failed to provide discounts to buyers of Unit Investment Trusts, a type of investment company that offers redeemable units, of a generally fixed portfolio of securities, that terminate on a specific date.
UIT sponsors generally offer sales charge discounts to investors, known as breakpoint discounts and rollover and exchange discounts.
FINRA found that Merrill Lynch failed to have an adequate supervisory system in place to ensure customers received appropriate UIT discounts.
Firms have been on notice since at least 2004 that they must develop and implement procedures to ensure customers receive appropriate sales charge discounts for UIT investments, FINRA acting chief of enforcement James S. Shorris said in a statement.
Merrill Lynch was acquired by Bank of America Corp. last year.
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